Marketing 201 Midterm 2 Review: Drexel University (Ch: 7,11,12,13 & 14)

Actual Product
Brand Name, Quality Level, Packaging & Features / Design
Associated Services
Financing, Product Warranty & Product Support
Core Customer Value
Actual Product & Associated Services
Types of Products
Specialty, Shopping, Convenience & Unsought
Branding Examples
Brand Name, URL’s, Logos and Symbols, Characters, Slogans and Jingles/Sounds
Value Branding: Step 1-2
Facilitate Purchasing, Establish Loyalty
Value Branding: Step 3-4
Protect from Competition, Reduce Marketing Costs
Value Branding: Step 5-6
Are Assets, Impact Market Value
Brand Ownership
manufacturer brands or national brands
Brand Association
reflects the mental links that consumers make between a brand and its key product attributes, such as logo, slogan, or famous personality
Brand Dilution
when the brand extension adversely affects consumer perceptions about the attributes the core brand is believed to hold
Brand Equity
the set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product or service
Brand Extension
the use of the same brand name for new products being introduced to the same or new markets
Brand Licensing
a contractual agreement between firms, whereby one firm allows another to use its brand name, logo, symbols, and/or characters in exchange for a negotiated fee
Brand Loyalty
when a consumer buys the same brand’s product or service repeatedly over time rather than buying from multiple suppliers within the same category
Brand Repositioning (Rebranding)
a strategy in which marketers change a brand’s focus to target new markets or realign the brand’s core emphasis with changing market preferences
Co-Branding
the practice of marketing two or more brands together, on the same package or promotion
Perceived Value
the relationship between a product or service’s benefits and its cost
Product Assortment (Product Mix)
the complete set of all products offered by a firm
Product Line Depth
equals the number of products within a product line
Product Mix (Breadth)
represents a count of the number of product lines offered by the firm.
Product Lines
groups of associated items, such as items that consumers use together or think of as part of a group of similiar products

Chapter 11 Ends Here

Why Firms Create New Products
(1) Changing Customer Needs
(2) Market Saturation
(3) Improving Business Relationships
(4) Managing Risk through Diversity
(5) Fashion Cycles
Factors Affecting Product Diffusion
Relative Advantage, Compatibility, Observability, Complexity and Trialability
Product Development
prototype, alpha testing, beta testing
Pre-Market Tests
Customer, exposed, surveyed, firm makes decision
Test Marketing
mini-product launch, more expensive than pre-market tests, market demand is estimated
Alpha Testing
where the firm attempts to determine whether the product will perform according to its design and whether it satisfies the need for which it was intended.
Beta Testing
uses potential consumers, who examine the product prototype in a “real use” setting to determine its functionality, performance, potential problems, and other issues specific to its use.
When a Product is in a Decline Stage
position yourself for a niche segment of diehard consumers or those with special needs or they completely exit the market.
Diffusion of Innovation
the process by which the use of an innovation spreads throughout a market group, over time and over various categories of adopters.
Growth Stage
marked by a growing number of product adopters, rapid growth in industry sales, and increases in both the number of competitors and the number of available product versions.
Innovation
the process by which ideas are transformed into new products and services that will help firms grow.
Introduction Stage
a new, innovative product or service usually starts with a single firm, and innovators are the ones to try the new offering.
Maturity Stage
the stage within the product life cycle is characterized by the adoption of the product by the late majority and intense competition for market share among firms.
Pioneers (Breakthroughs)
are new product introductions, especially new-to-the-world products that create new markets.
Premarket Tests
conducted by firms before they actually bring a product or service to market to determine how many customers will try and then continue to use the product or service according to a small group of potential consumers.
Product Life Cycle
defines the stages that new products move through as they enter, get established in, and ultimately leave the marketplace and thereby offers marketers a starting point for their strategy planning.
Prototype
the first physical form or service description of a new product, still in rough or tentative form, that has the same properties as a new product but is produced through different manufacturing processes—sometimes even crafted individually.
Reverse Engineering
involves taking apart a product, analyzing it, and creating an improved product that does not infringe on the competitors’ patents, if any exist.
Test Marketing
introduces the offering to a limited geographical area prior to a national launch.

Chapter 12 Ends Here

Communications Gap
refers to the difference between the actual service provided to customers and the service that the firm’s promotion program promises.
Delivery Gap
the difference between the firm’s service standards and the actual service it provides to customers.
Knowledge Gap
reflects the difference between customers’ expectations and the firm’s perception of those customer expectations
Service
any intangible offering that involves a deed, performance, or effort that cannot be physically possessed
Service Quality
the customers’ perceptions of how well a service meets or exceeds their expectations.
Standards Gap
the difference between the firm’s service standards and the actual service it provides to the customer
Voice-of-Customer (VOC) Program
collects customer inputs and integrates them into managerial decisions.
Zone of Tolerance
the area between customers’ expectations regarding their desired service and the minimum level of acceptable service.
Service vs Goods
intangible, inseparable, heterogeneous (variable), perishable
Break-Even Analysis
enables managers to examine the relationships among cost, price, revenue, and profit over different levels of production and sales.
Cross-Price Elasticity
is the percentage change in the quantity of Product A demanded compared with the percentage change in price in Product B.
Fixed Costs
are those costs that remain essentially at the same level, regardless of any changes in the volume of production.
Income Effect
the change in the quantity of a product demanded by consumers due to a change in their income.
Maximizing Profits
assumes that if a firm can accurately specify a mathematical model that captures all the factors required to explain and predict sales and profits, it should be able to identify the price at which its profits are maximized.
Substitution Effect
refers to consumers’ ability to substitute other products for the focal brand.
Target Profit Pricing
implemented by firms to meet a targeted profit objective. The firms use price to stimulate a certain level of sales at a certain profit per unit.
Target Return Pricing
occurs when firms employ pricing strategies designed to produce a specific return on their investment, usually expressed as a percentage of sales.
Total Cost
the sum of the variable and fixed costs.
Variable Costs
the costs that vary with production value.
Cumulative Quantity Discount
uses the amount purchased over a specified time period and usually involves several transactions.
Horizontal Price Fixing
occurs when competitors that produce and sell competing products collude, or work together, to control prices, effectively taking price out of the decision process for consumers.
Price Skimming
a strategy that occurs in many markets, and particularly for new and innovative products or services, and involves consumers being willing to pay a higher price to obtain the new product or service.
Reference Price
the price against which buyers compare the actual selling price of the product and that facilitates their evaluation process.
Uniform Delivered Pricing
occurs when the shipper charges one rate, no matter where the buyer is located.
Vertical Price Fixing
occurs when parties at different levels of the same marketing channel collude to control the prices passed on to consumers.
5 C’s of Pricing
Costs, Competition, Customers, Channel Members & Company Objectives
Elastic
price sensitive
Inelastic
price insensitive
New Buy
a purchase of a good or service for the first time
Modified Rebuy
the buyer has purchased a similar product in the past but has decided to change some specifications.
Straight Rebuy
when the buyer or buying organization simply buys additional units of products that have been purchased previously
Chapter 7 Learning Objects
Chapter 7 Learning Objects
What factors affect the B2B buying process?
resellers, institutions, government, and manufactures/service providers
What is the difference between new buy, rebuy, and modified rebuy?
New Buy – a purchase of a good or service for the first time

Modified Rebuy – the buyer has purchased a similar product in the past but has decided to change some specifications.

What are the six different buying roles?
need recognition, product specification, RFP process, proposal analysis and supplier, order specification and vendor/performance assessment using metrics
Chapter 11 Learning Objects
Chapter 11 Learning Objects
Explain the 3 components of a product
Brand Name, Quality Level, Packaging & Features / Design
What are the four types of consumer products?
speciality, shopping, convenience, unsought
How do brands create value for the customer and the firm?
What are the components of brand equity?
the set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product or service
What is the difference between product line breadth versus depth?
Product Breath – represents a count of the number of product lines offered by the firm.

Product Depth – equals the number of products within a product line

Why change product line breadth?
Why change product line depth?
What are the differences among manufacturer and private-label brands?
Private Label – products developed by retailers

Manufacturer Brands – owned and managed by the manufacturer. Ex: Nike, Coca-Cola, Sony

What is co-branding?
the practice of marketing two or more brands together, on the same package or promotion
What is the difference between brand extension and line extension?
Brand Extension – the use of the same brand name for new products being introduced to the same or new markets

Line Extension – the use of the same brand name within the same product line and represents an increase in a product line’s depth

What is brand repositioning?
a strategy in which marketers change a brand’s focus to target new markets or realign the brand’s core emphasis with changing market preferences
Chapter 12 Learning Objects
Chapter 12 Learning Objects
What are the five groups on the diffusion of innovation curve?
Changing Customer Needs, Market Saturation, Improving Business Relationships, Fashion Cycles & Managing Risk through Diversity
What factors enhance the diffusion of a good or service?
Relative Advantage, Compatibility, Observability & Complexity and Trialability
What are the steps in the new product development process?
(1) Idea Generation
(2) Concept Testing
(3) Product Development
(4) Market Testing
(5) Product Launch
(6) Evaluation of Results
Identify different sources of new product ideas.
customer input, brainstorming, outsourcing, & competitor’ products
What are the stages in the product life-cycle?
Introduction, Growth, Maturity & Decline
How do sales and profits change during the various stages?
Sales have a steady upward trajectory until it exists it maturity stage into the decline stage.

Profit starts at near zero and treks up at the crossroad of growth and maturity. Then decline throughout maturity and decline stages.

Chapter 13 Learning Objects
Chapter 13 Learning Objects
What are the four marketing elements that distinguish services from products?
intangible, inseparable, heterogeneous (variable) and perishable
Why can’t we separate firms into just service or just product sellers?
Explain the four service gaps identified by the Gaps Model.
Knowledge Gap
Standards Gap
Delivery Gap
Communication Gap
List at least two ways to overcome each of the four service gaps.
Why is service recovery so important to companies?
can increase customer satisfaction, purchase intentions, and positive word of mouth marketing
What can companies do to recover from a service failure?
Chapter 14 Learning Objects
Chapter 14 Learning Objects
What are the five Cs of pricing?
Costs, Competition, Customers, Channel Members & Company Objectives
Identify the four types of company objectives.
profit, sales, competitor & customer oriented
What is the difference between elastic versus inelastic demand?
Elastic = price sensitive
Inelastic = prince insensitive
How does one calculate the break-even point in units?
Fixed Costs / Contributions or Price per Unit
Explain the difference between EDLP and high/low pricing.
High/Low – strategy is where the retailer will start with a higher price and give deep discounts in order to attract customers.

EDLP (Every Day Low Prices) – keep prices very low and rarely giving price discounts.

What pricing strategies should be considered when introducing a new product?
markdowns, quantity discounts, seasonal discounts, coupons, leader pricing, price bundling, leasing & rebates